You can start a business alone and grow it into a successful enterprise. But having a great business partner can help you achieve your goal even faster.
Many of today’s most successful companies – including Apple, Google, Twitter, and eBay – are a result of a powerful partnership. One of the most notable business duos is Bill Gates and Paul Allen, the founders of Microsoft. The two were childhood friends who shared a passion for computers and entrepreneurship.
Another example is Apple’s Steve Jobs and Steve Wozniak. The two Steves were friends from as far back as 1970. Wozniak was building a computer and Jobs saw the potential of making money from it. The two remained friends and business partners till Job’s death.
However, business partnerships are not all rainbows and butterflies. According to Noam Wasserman, a professor at Harvard Business School who studied almost 10,000 business founders for his book “The Founder’s Dilemma”, business partnerships can bring triumphant success or catastrophic disaster to a business.
Statistics show that the divorce rate for business partnerships is 80 per cent. A notable example of a failed partnership is Facebook’s Mark Zuckerberg and Eduardo Saverin. The two founded the company but according to Zuckerberg, Saverin was a lousy and absent partner at a critical point in Facebook’s growth. Zuckerberg ended up reducing Saverin’s shares to a minuscule amount and dropping his name from Facebook’s history.
Thanks to Zuckerberg’s determination, Facebook was able to survive the rift between its founders. Other companies haven’t been as lucky. There are many entrepreneurs who didn’t make it past the initial stages of their start-ups, thanks to lack of a suitable partner.
To avoid suffering the same fate, selecting the right business partner can’t be over-emphasised. Here are the top six tips you need to consider when choosing a business partner:
1. Shared vision and goals
Before you even consider having someone as your business partner, make sure that they share your vision and goals. Both of you can then team up to achieve your shared vision and goals. Someone who shares your vision will be just as dedicated as you are to the business. They’ll give it their 100 per cent, putting in their fair share of work the business. They’ll also be there to weather the storms alongside you instead of bailing at the first sign of trouble.
A partner who believes in your idea can also help you shape it into an even better idea. Ask your prospective prtner what they think of the business. Do they believe in the idea behind it? Where do they see themselves and the business in three years? How do they think you can improve your idea?
2. A good work ethic
Remember why Mark Zuckerberg and Eduardo Saverin broke up? When Zuckerberg was busy working on Facebook in Silicon Valley, Saverin was gallivanting all over New York. Clearly Saverin had a poor work ethic, which contributed to their disagreements.
When scouting for a partner, study the person’s work habits. You can ask questions about when they wake up and go to sleep, how they view work, who they look up to, and how they interact with supporting staff. You want to partner with someone who will work just as hard as you on the business.
3. Great business networks
Your network is your net worth.
Networking is a key element in succeeding at business. Your partner should come with a wide network of valuable connections.
Their networks could lead to more customers, get you insider knowledge on sourcing for goods, and information on where to sell goods for relatively higher prices. It could also lead you to hiring better employees for different roles in your company.
Your prospective business partner should have great rapport with the people around him, from former colleagues, bosses, business partners, or employees. All these will go a long way in achieving business success.
How well do you know your prospective business partner? Do you trust them? Trust is a non-negotiable quality in a business partner. Their level of integrity should be so high that you’re sure they won’t cheat or steal from you.
But it should even be deeper than that. You should be able to trust your partner’s judgement in business matters. And if you have a disagreement, you should be able to trust them to handle it maturely. Trust them to always tell you the truth even when it’s difficult, to treat everyone around them fairly, and not to start a competing business.
Experts recommend that you should know your partner for at least a year before going into business with them. Make sure that you have shared values – to help you can steer the business in the right direction.
5. Complementary skills
Being friends and trusting each other isn’t enough. Your business partner should also have skills and a personality that complements yours. For instance, in the case of Apple, Steve Jobs was the entrepreneurial visionary while Steve Wozniak was focused on creating the product.Partners with complementary skills are more likely to succeed. The broader their range of skills, the clearer their division of labour. According to Michael Gerber in his book The E-Myth, there are three key roles in every business. There is the Entrepreneur – the creative visionary: Manager – the one who handles administrative roles and brings planning and order: and the Technician – the crafts person who focuses on creating the product. Make sure that you and your partner have strengths in different areas.
6. Financial strength
A business is fuelled by money. Without this lifeblood, a business is destined to fail. As an entrepreneur, choose a business partner who has some financial muscle. Combined with yours, the capital you bring to the business will make it easier to achieve your business goals.
Before you start, agree on how much each of you will contribute as capital and what percentage of the business they own. In addition, your business partner should have good credit and proper financial management history.
Just like in the case of marriage, money is one of the root causes of business divorce. Therefore, have everything clearly stated in a signed contract agreement.